No. of Recommendations: 5
The link to Salesforce was very instructive. Salesforce’s largest VC investment is Docusign. Salesforce’s next two largest investments in order are Dropbox and Twilio. Nice top 3! Their #5 choice has disappointed, but who knows maybe it will turn around.

This also explains what appears to be an abnormally friendly and familiar relationship between Docusign and Salesforce. Reading the earnings conference notes of the conference prior to the last one the CEO was talking with how working closely with Salesforce it became apparent to them, with Salesforce’s help, that Docusign could move up the stack more than was originally envisioned. DocuSign and Salesforce are so close that an eventual buyout appears likely (albeit, one would wonder why, given how close they work together anyways and how wound up they are in each other).

In regard to the AI company that bought for $60 million. That turned out to be disappointing. There are no real plans as to what to do with it. Docusign is not planning on entering the marketing analytical market with the product. It appears it is more of a purchase in order to acquire AI capabilities. Docusign had none at all. Now one of the top officers from the company is the VP of engineering at Docusign.

Thus Docusign wanted to gain capabilities, any capabilities, to get a start in AI and not be disrupted by something out of the blue. Same reason they got into blockchain even though the blockchain business is presently minuscule.

Finally, the Systems of Agreement, yes, it is as nascent as we discussed. Docusign CEO stated exactly what I stated, they have 600 customers with their small sales force, imagine how many customers we can get with out large sales force. Docusign’s CEO admits however that although they are the largest player by far in eSignatures, that they are not one of the largest players in the SoA market.

As for Adobe competition. I am making some inferences here, and part of this comes from the admission that Docusign moving to the SoA market is moving into a market that will have larger and probably greater competition vs. their competitive positioning in the eSignature markets.

Adobe only markets its eSignature produce to larger enterprises. Adobe has their own SoA products. The large enterprise SoA market is the most lucrative market. Therefore, it seems reasonable that this is where Adobe is pushing their products. Therefore, Adobe really cares less if their total marketshare if 15% or 20% in eSignatures. What they care about is that they dominate the most lucrative segment of the market.

Thus, with all the talk about Adobe as a competitor, one need not worry about them so much in eSignatures. Where one must worry about them is competing for the most lucrative enterprise contracts in eSignature plus SoA.

As to the marketshare in that market, it may be helpful to look back at the Forrest report on it. It does sound to me like it is a market that is rapidly changing and that players like Adobe may be targeting against legacy incumbents who are probably tryin got defend their turf.

Thus the AI acquisition is not really that material. The SoA market brings Docusign into a market that is more competitive than they are use to given their dominance in their core market. And the relationship with Salesforce is like kissing cousins.

So whatever that is worth.

Tinker
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